Journal of Applied Case Research (JACR), Volume 13 Number 1

JACR is a publication of the Southwest Case Research Association (SWCRA). JACR publishes teaching cases in all business disciplines. Cases may be grounded in primary and/or secondary data sources. Whether primary or secondary, sources must be well documented.

Media Markt China Ltd. at a Crossroads

  • Thorsten Knauer, University of Bayreuth
  • Thomas Liessem, University of Münster
  • Jessica Nathmann, University of Münster
  • Friedrich Sommer, University of Münster
  • Helena Tilke, University of Münster

Synopsis

This is a decision-based case that has been completely written from public sources. Due to the usage of secondary sources, no disguises have been used.

The case deals with the challenge of internationalization of Media-Saturn-Holding GmbH, the leading electronic retail chain in Europe, faced while entering a foreign market. This challenge must be managed from two different perspectives, a strategic one and an operational one. On the one hand, the strategic perspective mainly includes the question of market attractiveness, the future business model, and company cooperation. On the other hand, the operational perspective is about a realistic roll-out scenario, investments and financing, and communication. In this regard it is also important to consider that these questions were already answered years ago. Now management is in the position of reviewing the old strategy and using its experience to create a plan for the next years. Among the most prominent internationalization issues is the doubtful public image of the current joint venture partner for the Chinese business, Foxconn.

In sum, the initial decision is whether or not to stay in the Chinese market. If the students choose the ongoing presence in China, three decisions need to be made: First, which (attractive) markets in China should be tackled with which business model? Second, how should the joint venture of Media Markt and Foxconn proceed? Third, what pace is appropriate for the expansion in the Chinese market? Is an accelerated expansion strategy preferable over an incremental one?

Keywords:

Strategic management, Internationalization, Competitive strategy, Corporate governance, Electronics retailer

Citation:

Knauer, T., Liessem, T., Nathmann, J., Sommer, F. and Tilke, H. (2015). Media Markt China Ltd. at a Crossroads. Journal of Applied Case Research, V13(1), 1-19. http://swcra.net/wp-content/uploads/2015/05/ V13_N1a_Media_Markt_Case.pdf

Curtain Call Executive Services

  • Steven D. Dolvin, Butler University

Synopsis

This case would be considered a critical incident, as it focuses on one primary issue – the valuation of a private equity investment in the underlying business. I have constructed the case based on consulting work I completed for the actual company, as they needed a valuation model for accounting purposes. So, all data, including the legal characteristics, are obtained directly from the company. However, for confidentiality reasons, the name of the firm has been changed.

This case itself concerns the valuation of an investment by a private equity firm in a mid-market business. The student must evaluate and understand the structure of the investment, which is effectively convertible preferred stock with a fixed maturity date. With this understanding, the student must then determine how best to value the investment, which is optimally done as a combination of straight debt and a call option on common stock. The student must also determine that the binomial (or lattice) approach to option valuation is appropriate.

Keywords:

Private Equity, Option Valuation, Binomial Option Pricing Model, Preferred Stock, Conversion Option

Citation:

Dolvin, Steven D. (2015). Curtain Call Executive Services. Journal of Applied Case Research, V 13 (1), 20-23. http://swcra.net/wp-content/uploads/2015/10/V13_N1b_Curtain Call_Case.pdf

Buckyballs: An Ethics-Based Discussion of Product Liability and the Responsible Corporate Officer Doctrine

  • Scott Dust, Miami University
  • Michael Fore, Eastern Kentucky University

Synopsis

This case uses secondary information obtained through the freedom of information act to offer a contemporary view of products liability and the Responsible Corporate Officer doctrine. The case recounts the story of Craig Zucker, the founder of Maxfield and Oberton Holdings, LLC (M&O), a company that created a product called Buckyballs – small, powerful, rare-earth magnets sold as office toys. As annual sales of Buckyballs reached $18 million, consumer complaints began to surface, provoking the Consumer Products Safety Commission (CPSC) to take action. Many complaints involved children who had digested the magnets and required surgery to remove them. The case follows the antagonistic interaction between Zucker and the CPSC, including decisions regarding warning label changes, enforcement of recalls, edgy social media campaigns to garner public support, and a contentious settlement. The case addresses the role of government in regulating the safety of products and the role of businesses in adhering to governmental product safety regulation. The case also incorporates a recent and unresolved debate regarding the responsible corporate officer doctrine, which holds corporate officers liable for company actions that threaten the public welfare. The crux of the case is that our legal system must balance two conflicting, yet important priorities: protecting the consumer and promoting individual rights. This case explores the tradeoffs and caveats within the legal system. The case also enables students to evaluate these challenges from an ethical decision-making perspective. The legal discussion is paired with an explanation of moral perspectives (i.e., utilitarianism, individualism, moral rights, and justice), providing a framework to explore why certain decisions are right or wrong. This framework ensures that students will recognize that parties often reach conflicting decisions. In doing so, this case highlights the challenges that effect both individuals and corporations in making decisions that are in the best interest of society.

Keywords:

Business law, product liability, Responsible Corporate Officer doctrine, business ethics, ethical decision making

Citation:

Dust, S. B., Fore, M. (2015). Buckyballs: An Ethics-Based Discussion of Product Liability and the Responsible Corporate Officer Doctrine. Journal of Applied Case Research, V13(1), 24-31. http://swcra.net/wp-content/uploads/2016/02/V13_N1c_Buckyballs_Case.pdf

The Challenges of Foundation Stewardship: When a Philanthropic Gift Becomes a Burden

  • Ruth Bernstein, University of Washington – Tacoma
  • Fabio Ambrosio, Pacific Lutheran University
  • Lise Anne Slatten, University of Louisiana at Lafayette

Synopsis

The Challenges of Foundation Stewardship is a decision-based case. The name of the foundation has been disguised. The case examines a private foundation established with the ideal that giving is ‘fun.’ However, with a divided board of directors composed of members from two splenetic families, there were many disagreements and the ‘fun’ was long gone.

The case delves into the challenges of governing a private foundation without a mission statement, a grant (spending) policy, or clear donor guidance. In the case study, the lack of clear operational guidance enabled individual board members, without any discussion or approval at the board level, to award grants. The board members, despite an attempt to keep the foundation operational, resolved to dissolve the foundation because it was no longer feasible to govern with a divided board. However, dissolving the foundation proved to be complex, time-consuming, and costly in part due to associated legal and tax issues. The case illustrates the importance of donor intent, mission statements, giving policies, and shared versus individual board member roles and responsibilities. Students will be presented with an overview of the legal and tax ramifications of each dissolution option. At the conclusion of the case, the students will decide which option is best for the foundation and will justify their decision.

This case illustrates what constitutes good governance in nonprofit organizations by stressing the importance of a clear mission and spending policy. The students will learn how to avoid the pitfalls that led to The Gift Fund’s dissolution.

Keywords:

Nonprofit, strategy, mission

Citation:

Bernstein, R., Ambrosio, F., Slatten, L.A. (2015). The Challenges of Foundation Stewardship: When a Philanthropic Gift Becomes a Burden. Journal of Applied Case Research, V 13 (1), 32-52. http://swcra.net/wp-content/uploads/2016/02/V13_N1d_Gift_Case.pdf

Moonbot Studios: A Lunar Adventure in Louisiana

  • Timothy Wise, Southern Arkansas University

Synopsis

In 2010, William “Bill” Joyce, an award winning children’s book author/illustrator from Shreveport, Louisiana, decided to form his own studio to produce animated films, internet apps, storybooks, and comics. Funded by investors and supported by the State of Louisiana’s initiative to bring creativity-based industries to the state, Joyce began assembling a team of artists, animators, and entertainment industry administrators to launch the venture. The process was chaotic at first, but the studio had soon moved into its own specially designed space, purchased the needed equipment, and hired around 30 employees. The first two projects, produced in tandem, were an animated short and an iPod app, both based on a story called The Fantastic Flying Books of Mr. Morris Lessmore. Both projects launched in May 2011 and by early July, partly in response to an article in a prominent magazine, both had climbed to the top of the iTunes charts. Both projects garnered a variety of awards and, in March 2012, the animated short made national news by receiving an Oscar. This case tells of the studio’s development, studying the evolution of its structure, processes, and culture from the perspectives of organization design and behavior and considering future directions for the studio. How can it continue to grow without losing the chemistry that produced its early success? What problems, based on organization research, is it likely to encounter?

Keywords:

Creativity, Collaboration, Teamwork, Entrepreneurship, Media, Innovation

Citation:

Wise, T. (2015). Moonbot Studios: A Lunar Adventure in Louisiana. Journal of Applied Case Research, V13(1), 53-71. http://swcra.net/wp-content/uploads/2016/03/V13_N1e_Moonbot_Case.pdf